02920cam a22003137 4500001000700000003000500007005001700012008004100029100001800070245017300088260006600261490004200327500001800369520140000387530006101787538007201848538003601920690008401956690010502040690009402145690011102239700002202350700002002372700002002392710004202412830007702454856003802531856003702569w15686NBER20161210014355.0161210s2010 mau||||fs|||| 000 0 eng d1 aEinav, Liran.10aHow general are risk preferences? Choices under uncertainty in different domains.h[electronic resource] /cLiran Einav, Amy Finkelstein, Iuliana Pascu, Mark R. Cullen. aCambridge, Mass.bNational Bureau of Economic Researchc2010.1 aNBER working paper seriesvno. w15686 aJanuary 2010.3 aWe examine the extent to which an individual's actual insurance and investment choices display a stable ranking in willingness to bear risk, relative to his peers, across different contexts. We do so by examining the same individuals' decisions regarding their 401(k) asset allocations and their choices in five different employer-provided insurance domains, including health and disability insurance. We reject the null that there is no domain-general component of preferences. Among the five insurance domains, the magnitude of the domain-general component of preferences appears substantial; we find for example that one's choices in other insurance domains are substantially more predictive of one's choice in a given insurance domain than either one's detailed demographic characteristics or one's claims experience in that domain. However, we find considerably less predictive power between one's insurance choices and the riskiness of one's 401(k) asset allocations, suggesting that the common element of an individual's preferences may be stronger among domains that are "closer" in context. We also find that the relationship between insurance and investment choices appears considerably larger for employees who may be associated with better "financial sophistication." Overall, we view our findings as largely consistent with an important domain-general component of risk preferences. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aD14 - Household Saving; Personal Finance2Journal of Economic Literature class. 7aD81 - Criteria for Decision-Making under Risk and Uncertainty2Journal of Economic Literature class. 7aG11 - Portfolio Choice • Investment Decisions2Journal of Economic Literature class. 7aG22 - Insurance • Insurance Companies • Actuarial Studies2Journal of Economic Literature class.1 aFinkelstein, Amy.1 aPascu, Iuliana.1 aCullen, Mark R.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w15686.4 uhttp://www.nber.org/papers/w1568641uhttp://dx.doi.org/10.3386/w15686